126 N.Y.S. 366 | N.Y. App. Div. | 1910
Lead Opinion
. The action is for money had and received, the claim .being that the defendant accepted and-retained $5,000 of the plaintiff’s money in payment of a subscription for' twenty-five -shares of its stock after the entire authorized capital stock had been allotted. The certificate' of incorporation of the defendant was filed in the office óf the Superintendent of Banks on the' 25th day of March, 1907. On the. 26th day of September, 1907, the first meeting of its - board of directors was held at which one Howard Maxwell was elected president. He had theretofore acted as ■ chairman of the incorporators. On the twenty-seventh day of September, Maxwell, as president,' and Bouker, as secretary, verified an affidavit stating _who the officers and stockholders of the defendant were but not including the plain- ■ tiff’s name in the list of stockholders, and another affidavit that the whole amount of thé capital stock had been in good faith subscribed and paid in in cash. The defendant was organized with a capital ‘ and surplus of $1,000,000. On the thirtieth of September a bank examiner certified that the books of the Oriental Bank showed a credit to the defendant of $1,000,000, the amount of its capital and
“ International Trust Company,
“Broadway and Fulton Street,
“Hew Tore, Oct. 15, 1907.
“ Received of E. G. Higginbotham Five thousand dollars in full . payment for twenty-jwe shares of stock of the International Trust Company.
“ This receipt will be exchangeable, on surrender, for engraved certificate when same are completed.
“ HOWARD MAXWELL,
'“ Chairman Organization Oom.
“ International Trust Go.
“ President.”
The words “ Chairman Organization Com.” after his signature were stricken out and the word “ President ” written in by said
Subscriptions to stock are assets of the corpoi’ation, and there can be no doubt that a cozqzoration can maintain actions to recover such subscriptions. It must follow that in receiving payments of subscriptions and in issuing receipts, agreeing to exchange them for engi’aved certificates when prepared, the president lias authoz-ity to, and does, bind the corporation. Maxwell was the'plaintiff’s agent to enter his subscription upon the subscription books of the company, but he was the defendant’s agent to receive payment of sub
However, the plaintiff did not rest upon the receipt alone, but proved that the defendant got the benefit of his subscription. On the morning of the thirtieth of September the defendant still lacked $145,000 of having the necessary $1,000,000 to its credit in the Oriental Bank. The respondent suggests that that shortage included Maxwell’s subscription of $125,000. But the only evidence in the record with respect to his subscription is the receipt book which shows that it was paid September twenty-seventh. In order to get the necessary $145,000 which was lacking, Gow, one of the defendant’s directors, requested the cashier of the Borough Bank of Brooklyn, of which Maxwell was president, ■ to send a cashier’s check for that amount. The cashier communicated with Maxwell, who authorized that to be done, and thereupon drew a cashier’s check for $145,000, payable to the order of the defendant, which was deposited by the defendant in the Oriental Bank, and thereby the defendant was enabled to procure the certificate of the Superintendent of Banks, enabling it to commence business. To keep his accounts straight the said cashier, upon the direction of Maxwell, charged $145,000 to the account of a depositor and credited. that amount to the cashier’s account. Maxwell, as chairman, kept an account in the Borough Bank in which he deposited certain moneys paid him by the subscribers to the defendant’s stock. On the tenth of October there was a credit to that account of $105,000, and on that date the cashier, at his direction, transferred that amount to the credit of the account from which the $145,000 had been taken, and on the sixteenth of October the- further sum of $12,000, which included the plaintiff’s $5,000, was likewise trans-' ferred. Thus $117,000 of the money misappropriated to enable the defendant to begin business was repaid from tlm money collected by Maxwell from subscribers, including the plaintiff. It seems to me that the case is precisely the same as though the said $117,000 had in the first instance been deposited in the Oriental Bank to the credit of the defendant. It is of no consequence that the identical money collected on the plaintiff’s check did not reach the defendant. The money which was first stolen went into the defendant’s treasury, and the defendant received the benefit of it. If that
The judgment and order should be reversed and a new trial granted, with costs to appellant to abide the event.
Clarke and Dowling, JJ., concurred; Ingraham, P. J.,' and Scott, J., dissented.
Dissenting Opinion
(dissenting): ■
I dissent. It appeared from the testimony that certain individuals, of whom the plaintiff was one, constituted themselves a committee to organize a trust company under the laws of the State of Hew York; that one Howard Maxwell was constituted the chairman of that committee, and-that as such he was authorized to receive subscription's to the capital stock of the company, which was to consist of 5,000 shares of- the par value of $100 each, and each subscriber was to pay $2.00 per share for the stock, so that the trust company would start business with a capital of $500,0.00 and a surplus of $500,000., Subscription blanks were prepared, by which each subscriber subscribed for the number of shares of stock stated, for which.he agreed to pay $200 per share, and such subscription agreement authorized “Howard Maxwell, as attorney for me, to enter upon the. proper subscription book my subscription for said shares, or for any shares that may be allotted me. in the event of over-subscription.” There was a book containing a record of these subscriptions showing the number of each subscription, its date, the number of shares subscribed and the amount paid by each, subscriber. This book was produced and introduced in evidence by the plaintiff. On the-20th of March,' 1907, a certificate of organization - had been executed which contained the names of those organizing.
Whatever authority this committed had to receive subscriptions then clearly terminated. Neither the corporation nor the com-' mittee could receive further subscriptions after the amount of the authorized capital stock had all been subscribed;' but as the capital stock had all been subscribed before the formal authorization to do business, it seems to me that no act of this committee, who had been organized to.obtain subscriptions to the stock, could bind the corporation as to subscriptions subsequently obtained after the stock had all been subscribed and had been paid for .to the corporation. The subscription to the stock was complete. The stock had been subscribed. The amount called for by the subscription had been actually paid in in cash, and was on deposit to the credit of the corporation, and the corporation had started to do business under its charter as an. actual existing corporation.. There is no dispute but that the subscription for the capital stock had actually been paid in by the first day of October, and the plaintiff had then, so far as appears, neither subscribed to the stock, nor actually paid any money to either the corporation or to the committee.-'
It appeared from the evidence that prior to the first day. of October the amount paid upon these various subscriptions had not equalled the amount that was required by the sum of $145,000, and that on September thirtieth, to make that amount good, Maxwell, who was the president of the Borough Bank, had directed the cashier of that bank to send to him a cashier’s check for $145,00 to make good the subscription. Just whose subscriptions this was designed to make good does hot appear from the record, but Maxwell, himself,. had subscribed for 625 shares, for which he was required to pay $125,000. To justify this appropriation of the bank’s money, he directed the cashier to charge the cashier’s check to an account in that bank in the name of one Carrie M. McGuire, to which there was a credit of an amount exceeding $145,000. That this was an embezzlement of the money of the bank, or the McGuire account, may be conceded; but by the payment' of. this $145,000 the subscription to the stock of the defendant corporation was complete. The $1,000,000 required by the subscription was deposited- in a bank to the credit of the defendant, and it was upon this deposit
This subscription is undated,.but according to the book introduced by the plaintiff it appears that it was the last one received, and was entered in the. book as of the date of October 15, 1907. So far as appears from the evidence and from the entries in this subscription book the subscription of the plaintiff and the payment of the $5,000, the amount required by his subscription, were all received upon the same day, October 15,1907. It is not contended that the defendant ever directly received any part of this $5,000. The money was paid to Maxwell as chairman and was clearly received by Maxwell as chairman of the committee to receive subscriptions and not on behalf of the bank. It was a void, subscription on its face because.all of the stock of the bank had been subscribed. The record of the' subscriptions which had completed all authorized capital stock had been filed With the Banking Department, and the bank was actually transacting business which it could not do until the stock had been subscribed in full and the subscriptions paid in. It
At the end of the' case the plaintiff asked for the direction of a verdict, which the court denied. The defendant then moved to dismiss the complaint, which motion the court granted. There was no request to submit any question to the jury, and, therefore, all questions of fact were resolved in favor of the defendant.
I think it clear, upon this evidence, that the court was right in refusing to direct a verdict for the plaintiff, and it was not error to direct a verdict for the defendant, so that the judgment should be affirmed.
Scott, J., concurred.
Judgment and order reversed, new trial ordered, costs to appellant to abide event.